Euro hits 16-month low vs dollar

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LONDON, Jan 6 (Reuters): The euro hit 16-month lows against the dollar and sterling on Friday and hovered near an 11-year low versus the yen, with further declines expected as worries grow about a worsening euro zone debt crisis and sovereign funding pressures.
Next week's Italian and Spanish government bond sales are seen as the year's first big tests of fragile euro zone countries' abilities to raise funds and are likely to keep the market on edge and the euro under pressure.
US jobs data due at 1330 GMT could provide some optimism on the outlook for the US economy after a measure of private-sector hiring surged in December. They are expected to show a rise of 150,000, but many think the figure may be higher.
Strong US jobs data could help risk sentiment but many analysts expect this may weigh further on the euro versus the dollar as investors focus on the divergence between the two economies, with the euro zone seen heading towards recession.